Asia Stocks recap: Pricing in U.S. and Chinese numbers

June 8, 2014, 7:54 PM ET

Shutterstock/Karen Roach

Welcome to the Asia Stocks live blog, a running account of what the region’s share markets are doing, along with other news. While some Japanese data were released this morning, the biggest market cues may be from news out over the weekend: strong U.S. payrolls and a more mixed Chinese trade report.

Over the past several days, Asian markets have been given two important data sets to trade off of: The U.S. jobs report and Chinese trade statistics.

The U.S. May employment data received broadly positive reaction across much of the economist community. To quote RBC Capital Markets: “It is a rarity that the jobs report checks off all of the positive boxes, and it has been a further rarity that we get a strong read on payroll growth following a robust and near-300,000 [net-job-gain] result in the previous month. So from that standpoint, this number could hardly have been better.”

Barclays says the 7% increase for May exports, compared to a year earlier, was not too far above a consensus forecast for 6.7% growth. But more importantly, it showed a sharp acceleration from April’s 0.9% rise and a major rebound from March’s 6.6% drop in exports.

“We think the year-on-year improvement reflects both a recovery in export momentum and a low base of comparison, and we believe such favorable factors will continue and will support exports [growth] of approximately 8% in 2014,” Barclays economists write.

On the other hand, May’s 1.6% fall in imports points to weak investment growth, they write, noting the consensus projection was for a rise of 6%.

“The slowdown appears to be broad-based, suggesting still-soft domestic investment demand at this early stage of growth recovery,” Barclays says.

When taken together, the export and import prints suggest trade may become a positive contribution to the gross domestic product this quarter, “but more easing remains necessary” from the People’s Bank of China, according to Barclays.

The bank says it still sees “a recovery in growth momentum” in the April-June period, although “the recovery remains at its early stage.”

Tokyo is off to a strong start, with the blue chips climbing across most sectors after a series of good macro news.

A few minutes in, and the Nikkei Average is 0.7% higher, just off its opening high, while the broader Topix is up 0.4%.

A weaker yen is once again the keystone in the arch upward for the stock market. After some brief volatility following the release of Japanese data just ahead of the open (more on this in a moment), the dollar is back at ¥102.60, solidly higher than its ¥102.29 level last Friday when the Nikkei Average closed flat.

Sony is up 1.5%, and Nintendo is up 1.4%. In a report out Sunday, The Wall Street Journal details how Sony is beating its U.S. videogame rival Microsoft, with the former’s PlayStation 4 selling 7 million units since its latest console release, compared with sales of 5 million consoles for the latter’s Xbox One.

Meanwhile, part of the story behind this morning’s gains appears to be the (mostly) upbeat economic numbers out of both Japan and the U.S.

While the U.S. jobs numbers (see earlier post on today’s blog) helped Wall Street finish higher on Friday, Japan has added a little to the global cheer this morning with a decent upward revision to its economic growth for the first calendar quarter.

It turns out Japan’s gross domestic product rose by 6.7% in January-March compared to a year earlier, not the originally reported 5.9%. On a quarterly basis, GDP growth was revised to 1.6% from 1.5%. A key driver in the mark-up was private non-residential investment, which increased by a full 7.6%, as opposed to the initially estimated gain of 4.9%.

All the same, the robust growth was for the period before Japan’s second-ever hike to the national consumption tax, and the real question — some economists say — is how badly growth will suffer in the current quarter, as the economy reacts to the higher sales tax.

Besides the GDP read from the Cabinet Office, the Finance Ministry offered markets the April results for Japan’s current account. Here, the numbers were less cheery, with the current-account surplus coming in at ¥187.4 billion ($1.83 billion), which although wider than March’s ¥116.4 billion, trailed a consensus estimate of ¥320 billion, as reported by Dow Jones Newswires.

If you’re wondering, the Australian markets are closed today to mark the Queen’s Birthday.

And this is interesting because the queen in question — Queen Elizabeth II of the House of Windsor — was born on April 21.

It turns out that the Commonwealth nations which choose to fete the Queen do on their own timetables. In Australia’s case, the British monarch’s birthday was originally celebrated on that particular monarch’s actual birthday, but when George V died in 1936, they decided to hold the birthday party on the first Monday of June, no matter what.

So even though Elizabeth II is a Taurus, Australia has her as a Gemini, just like her grandfather.

Of course, it’s not just Australia which does this: Even the U.K. itself opts for a June celebration, perhaps in hope the weather will be a little better than in late April.

In fact, it seems that the Falkland Islands (population 3,000) is one of the few places outside Buckingham Palace that celebrate’s Elizabeth’s birthday on her birthday.

Anyway, just something to think about if you’re planning on sending Her Britannic Majesty a Starbucks gift card.

Hong Kong stocks are rising this morning on a strong cue from the U.S., with the Hang Seng Index adding 0.8%.

However, Shanghai is suffering under the weight of falling property shares, amid further signs of a slowdown in China’s housing market. The Shanghai Composite Index is seesawing between small gains and losses, currently up 0.1%.

Land sales in 300 Chinese cities plunged 45% in May from a year ago, with the land-transaction fees also plummeting 38% year-on-year, according to data published Friday by China’s leading real-estate website Soufun.com.

Several major developers are suffering losses on the Chinese markets, with Poly Property Group down 7.7%, Shimao Property Holdings down 2.8%, Sunac China Holdings off 1.7%, and Fantasia Holding Group lower by 1.1% in Hong Kong. In Shanghai, Metro Land Corp. is down 4.2%, Huayuan Property Co. is down 1%, and Beijing Dalong Weiye Real Estatte Development is moving lower by 0.7%.

However, techs are rising across the board after their counterparts rallied in the U.S. Hang Seng Index heavyweight Tencent Holdings is advancing 1.2%, and computer maker Lenovo Group, also on the benchmark index, is up 0.8%.

The duty-free-shopping bastion of Hong Kong may be witnessing a reversal in the fortunes of its richest residents and the companies that cater to them, writes Craig Stephen in this week’s column.

And this, Stephen says, is making the territory a test kitchen for the outcomes of theories advanced by economist Thomas Piketty, and in particular, what happens if Piketty’s inexorably widening wealth gap sparks a backlash.

As mentioned earlier in today’s blog, China’s property market is cooling off dramatically despite the onset of the sector’s traditionally “hot season,” as both land sales and transaction values plunged in May across 300 major Chinese cities.

Total land sales fell to 1,767 transactions in May in 300 Chinese cities, down 45% from a year ago and 19% lower than in the previous month, according to a survey published Friday on China’s leading real estate website Soufun.com.

In the same month, the total transaction value for land sales dropped 38% year-on-year.

Story Conversation

About The Tell

The Tell is MarketWatch’s fast and engaging look at trends and themes in the day’s markets. Drawing on our reporters, analysts and commentators around the world, as well as selecting the best of the rest online, The Tell is all about the pulse of the markets through news, insight and strategic information to help you make the best investing decisions. Got a tip? Tell us at TheTell@MarketWatch.com